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Deribit Perpetual: Bitcoin Futures Exchange Opens Improved Perpetual Swap
Deribit Bitcoin Future Exchange Launches An Improved Bitcoin Perpetual Swap
Deribit just launched a new and improved version of their popular Perpetual Swap. The released Beta product is fully tradable and the team expects to add additional features quite soon.
Deribit - Bitcoin Futures & Options Exchange is the first platform in the world offering plain "vanilla" European options as well as bitcoin futures with margin. It is fastest, most technically advanced bitcoin exchange to date launches. The basic purpose of the exchange is to trade plain European style cash-settled options on the Deribit BTC index, with margin and up to 10x leverage. Additionally, it is used to trade futures that settle on the Deribit BTC index, with up to 20x leverage.
Notably, the Perpetual is responsible for close to half of global bitcoin trade as it allows traders to take positions without any bitcoin actually changing hands. It features low fees as traders can take advantage of high levels of leverage.
What Comes With The New Upgrade
- Fast execution: The Deribit Perpetual executes orders 20-40 times faster than the conventional Perpetual on average, and in fast-moving markets, the difference can be significantly large. Fast execution can have a positive effect on profits, especially in the case of large price moves. Ut also provides Deribit users with the comfort that there are no preferred parties that are allowed to front run the market.
- Continuous Pricing: To keep its price close to the bitcoin price, a Perpetual uses something called funding payments that occur between the buyers and sellers of the contract. The conventional Perpetual transfers the funding payment every 8 hours which can cause bumps in the contract price. The Deribit Perpetual makes tiny payments on a microsecond basis which completely avoids price disturbances.
- Fair Liquidation: A number of high profile liquidation related incidents at other exchanges have resulted in large losses for traders. Deribit has designed a fairer liquidation mechanism that executes liquidations on an incremental basis while continuously trying to bring the position back into compliance. Is a position is eventually closed out, debris customers retain any capital that is left over instead of automatically losing their entire margin.
Earlier this week, Deribit announced the release of a major upgrade and sub-accounts on the platform.
Deribit Bitcoin Futures Exchange Adds Sub-Accounts And Massive System Updates
Deribit has recently informed its users about a change that has been finalized. The update will be massive and change the whole infrastructure of the exchange. It was developed over more than half a year and the main goal was to create a platform that could really be scalable so the platform would be able to grow and reach millions of users.
With the major upgrade ready to go and scalability also ready, the company introduced the new products that will be appearing on the exchange soon. As it seems to be the case with all major updates, you may face some bugs while using this new version, so you should report them to the company and they will be solved as soon as possible.
About The Upgrade
Before this update, the company used to have a traditional architecture and all its activities of its trading book were made using a single server. This, however, brought scalability problems to the company which started to appear after some time and caused serious bottlenecks in speed and performance.
To fix these issues, Deribit started to use a large cluster of dedicated servers in which matching engines are running on isolated servers now, which makes the exchange considerably faster even when there is a lot of users trading at the same time.
Now, the matching engines will only do the matching and order handling and it will be an isolated server that will send the order states and make the actual exchanges. This design is surely more flexible than the prior one because it allows the system to launch many web servers and to connect with them if ever need for scaling reasons.
The Deribit team has affirmed that this means that they will not need specific backup servers anymore and that they have unlimited scalability now and a brand new matching engine that is more efficient even when adding and removing orders from books.
Aside from scaling, the main new feature that this upgrade of Deribit has is the sub-accounts. They allow for a separation of a portion of a trading account. You can generate up to 4 sub-accounts for the implementation of managed accounts or dedicated margin for trades and strategies now.
The managed accounts allow for the creation of a separate login data, but you cannot withdraw any funds. This means that a third party trader could use this account without being able to remove the funds from its client or even access the client’s main account.
You can also use them for isolated margining of trades and strategies, too. While all positions in the company are generally cross-margined, but you can use sub-accounts to allocate a certain amount of margin to a given trade or strategy that you want to use.
If a trader is willing to risk assets or use a new strategy, he can assign this strategy to a separate account and will not lose all his money is the strategy is not successful. As you can instantly send funds, your margins can increase or decrease quickly at your will.
Deribit Futures & Options Trading to Offer USD Loans For Crypto Collateral
Deribit is a new blockchain platform that intends to make crypto-backed USD loans something real. According to the company, investing in successful long term crypto deals is not easy and, mas many holders intend to spend some part of their holdings and wealth at the same time that they remain invested, that can be a challenge and that is why this company exists.
What Is Deribit?
Deribit is online since June 2016, before most companies were even aware of the potential of the blockchain technology. The original founder of the company is John Jansen, and he teamed up with Marius Jansen, Sebastian Smyczýnski and Andrew Yanovsky to move the company forward.
The company started as a Bitcoin futures and options trading platform and has been expanding ever since. One of the branches that the company decided to follow was the lending market.
However, the loaning market is still difficult to use because the price of digital tokens is often too volatile. If you ask for a loan and get a certain collateral, the price of the tokens might change so much in such a short time that you will either have to force the borrower to increase the collateral or reduce the loan for it to be profitable.
While, especially last year, many companies were in the Bitcoin lending business, it is important to notice that less than $100 million USD in loans were made, which is somewhat of a low mark for such a global market that could have been so much bigger than it actually is.
How Does Deribit Work?
Deribit believes that the reason why the market is not bigger is the possibility of margin calls and how they are bad for both the sides of the equation. This way, it is impossible to make crypto lending really popular.
However, Deribit also believes that derivatives and put options can be a solution for this huge problem of the market. Put options, in case you are not familiar with them, are basically insurance options that you can use to ensure that the collateral never actually goes below the value of the loan and both the loan and lender are able to be satisfied.
By using derivatives, the market can give some annual interest to the loan by taking a premium. This way, the interest margin of the lender is higher and carries no risk as there is an additional percentage that is added in a way that it keeps the investment more stable.
This makes the borrower no longer facing margin call risks and gives it guarantees even if the collateral goes to zero, as you will have to post extra cash to repay the loan. The borrower pays the premium so the lender also does not get on the bad side of the equation.
The Deribit Verdict
This company looks to be a considerable option for who is interested in a lending company that you can really trust, as many of the ones that appeared last year simply did not seem to be too good. While not 100% secure, like all investments with crypto, this one is at least better than the ones that promise you everything without ever explaining how they will do what they promised.